Experiences in the air: master thesis on experience economy within the lowcost airline industry

Abstract

In the wake of the global recession consumers now find themselves in a down economy where prices are declining and companies no longer are able to compete on price. Consumers will therefore be tempted by the experiences surrounding the service and experiences will become more important than ever in this down economy. As a low cost airline company this tendency can be used as an opportunity to differ from the market and further influence in the brand equity building process – that can lead to brand loyalty. This thesis therefore set out to examine how experiences in relation to low cost airlines are being perceived and how low cost airlines in their building of brand loyalty. The problem statement related to the thesis is - How can low cost airline companies use the concept of the experience economy in order to create brand loyalty? And which elements should they focus on in the process? Building brand equity is an on-going process that resides in the minds of the consumers. A company’s first job is therefore to influence the perception of their brand in order to create a high level of brand equity. By influencing their customers via constantly communicating their functional benefits and at the same time evoking feelings created in an emotional interaction between the brand and the customer, it is possible to create the highest level of brand equity and hereby obtaining the customers’ brand loyalty. Experiences can be used in this matter to affect and capture the customers in an emotional way and through these strengthen the relationship between the brand and the customer. In the thesis a framework of four different experiences is build. This framework, The Experience Platform, act as the basic level of creating experiences and to obtain a more rich experience a company is obliged to dealing with all four experience realms. The framework works as a guiding principle on how to work with experiences as well as which elements the different experience realms consist of. In the thesis the elements related to an experience with a low cost airline is processed and further how they are being perceived in the mind of the consumers. The collected primary data bear in this matter witness to that low cost airline are being perceived as solely supplying the basic service - and nothing more. To stand out and differ from competitors low cost airlines are therefore forced to think in added value in order to exceed the customers’ level of expectations through that start building brand equity in the minds of the consumers in order to in the end being able to obtain a higher level of brand loyalty (= repeated purchase).